State checks retailers on antitrust allegation

(Dec. 5) LOS ANGELES — Outsiders — including California legal authorities — are getting involved in a strike that has for nearly two months hindered operations at three major retail grocery chains and put a crimp in normally brisk produce wholesaling and distributing businesses in Southern California.

California’s attorney general is investigating whether the three chains — Safeway Inc., Kroger Co. and Albertson’s Inc. — involved in a labor dispute with 70,000 clerks have broken antitrust laws by forming a financial pact.

Attorney General Bill Lockyer’s office issued subpoenas Dec. 1, demanding that the chains reveal the details of a mutual-aid pact, which the companies reportedly made to share revenue so they could reduce losses in the event of a strike.

The chains were ordered to turn over the documents to the state, according to a statement by Lockyer.

The pact could violate state and federal antitrust statutes, state officials said.

“This investigation will seek to determine whether the stores on the other side are playing fair and within the rules set by state and federal law,” Lockyer said in a written statement.

The chains have declined to give specifics on the arrangement, which had become a factor since the United Food and Commercial Workers union decided to pull picket lines from Kroger’s 249 Ralphs stores Oct. 31. Ralphs has seen a surge in customers ever since.

Peter Hurtgen, a federal mediator who has been involved in the negotiations since mid-November, has asked both sides not to provide details of the talks, Safeway said in a news release.

The grocery clerks went on strike or were locked out on Oct. 11 at Ralphs, Albertsons and Safeway-owned Vons and Pavilions stores. The dispute has affected 860 stores from San Luis Obispo to San Diego.

Two weeks before the state began its investigation, three California consumers filed a civil lawsuit in Superior Court citing the companies’ financial pact and alleging the chains are engaging in unfair competition.